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White House Should Revisit Volkswagen Settlement with EPA

In 2011, President Obama announced his administration’s goal of putting 1 million electric vehicles on the road by 2015. To this end, he twice went to Congress seeking funds for electric vehicle infrastructure. Both times, Congress demurred. Having been rebuffed by Congress, the Obama administration turned to other means. Last October, the Justice Department and the Environmental Protection Agency reached a settlement with Volkswagen over Clean Air Act violations attendant to the company’s installation of “defeat devices” on almost 500,000 cars sold in the U.S. The agreement includes a stipulation that VW work with EPA to invest $1.2 billion in electric vehicle infrastructure.

There are two glaring constitutional problems with the settlements:

  1. It’s an end-run around Congress’s power of the purse; and,
  2. It commits the Trump administration to spend limited resources—a quintessentially discretionary executive act—on implementing Obama’s failed legislative agenda.

In a coalition letter released this morning, nine free-market groups ask President Trump to investigate how much of the EPA’s resources would be spent implementing the electric vehicle infrastructure investment. We conclude:

If the results of this investigation lead your administration to have second thoughts about the settlement, we note that the consent decree includes a severance clause which would allow the parties to remove the electric vehicle investment without disrupting consumer relief. The $1.2 billion would instead be deposited into the U.S. Treasury.

The full version of the letter, with citations, is here. The letter is based on coalition comments submitted to the Justice Department in August 2016, which are available here